ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE LOS ANGELES vs.

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DEVELOPMENT MUTUAL FUND
Posted on June 20, 2013 by winnieclaire
Standard
G.R. No. 131082 June 19, 2000
Facts: petitioner Romulo, Mabanta, Buenaventura, Sayoc and De Los Angeles (hereafter
PETITIONER), a law firm, was exempted for the period 1 January to 31 December 1995, from
the Pag-IBIG Fund coverage by respondent HDMF because of a superior retirement plan.
The HDMF Board of Trustees, pursuant to Section 5 of Republic Act No. 7742, issued Board
Resolution No. 1011, Series of 1995, amending and modifying the Rules and Regulations
Implementing R.A. No. 7742. As amended, Section 1 of Rule VII provides that for a company
to be entitled to a waiver or suspension of Fund coverage, 3 it must have a plan providing
for both provident/retirement and housing benefits superior to those provided under the PagIBIG Fund.
PETITIONER submitted to the HDMF a letter explaining that the Amendments to the Rules
are invalid. In that the amendments are void insofar as they abolished the exemption
granted by Section 19 of P.D. 1752, as amended. The repeal of such exemption involves the
exercise of legislative power, which cannot be delegated to HMDF.
HDMF disapproved PETITIONERs application on the ground that the requirement that there
should be both a provident retirement fund and a housing plan is clear in the use of the
phrase and/or, and that the Rules Implementing R.A. No. 7742 did not amend nor repeal
Section 19 of P.D. No. 1752 but merely implement the law. The respondent Board was merely
exercising its rule-making power under Section 13 of P.D. No. 1752. It had the option to use
and only instead of or in the rules on waiver in order to effectively implement the PagIBIG Fund Law. By choosing and, the Board has clarified the confusion brought about by
the use of and/or in Section 19 of P.D. No. 1752, as amended.
PETITIONER filed a petition for review before the Court of Appeals but was dismissed.
Issue: Whether or not the board of HDMF exceeded its delegated power.
Held: YES. The controversy lies in the legal signification of the words and/or.
It seems to us clear from the language of the enabling law that Section 19 of P.D. No. 1752
intended that an employer with a provident plan or an employee housing plan superior to
that of the fund may obtain exemption from coverage. If the law had intended that the
employee [sic] should have both a superior provident plan and a housing plan in order to
qualify for exemption, it would have used the words and instead of and/or.
Notably, paragraph (a) of Section 19 requires for annual certification of waiver or
suspension, that the features of the plan or plans are superior to the fund or continue to be
so. The law obviously contemplates that the existence of either plan is considered as
sufficient basis for the grant of an exemption; needless to state, the concurrence of both
plans is more than sufficient. To require the existence of both plans would radically impose a
more stringent condition for waiver which was not clearly envisioned by the basic law. By
removing the disjunctive word or in the implementing rules the respondent Board has
exceeded its authority.
It is without doubt that the HDMF Board has rule-making power as provided in Section 51 17
of R.A. No. 7742 and Section 13 18 of P.D. No. 1752. However, it is well-settled that rules and
regulations, which are the product of a delegated power to create new and additional legal
provisions that have the effect of law, should be within the scope of the statutory authority
granted by the legislature to the administrative agency. 19 It is required that the regulation

be germane to the objects and purposes of the law, and be not in contradiction to, but in
conformity with, the standards prescribed by law.
In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII
of the 1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742 that
employers should have both provident/retirement and housing benefits for all its employees
in order to qualify for exemption from the Fund, it effectively amended Section 19 of P.D. No.
1752. And when the Board subsequently abolished that exemption through the 1996
Amendments, it repealed Section 19 of P.D. No. 1752. Such amendment and subsequent
repeal of Section 19 are both invalid, as they are not within the delegated power of the
Board. The HDMF cannot, in the exercise of its rule-making power, issue a regulation not
consistent with the law it seeks to apply. Indeed, administrative issuances must not override,
supplant or modify the law, but must remain consistent with the law they intend to carry out.
Only Congress can repeal or amend the law.